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Microsoft, Google Take Different Paths to Follow Groupon

Microsoft Bing is the latest to delve into local daily deals, which it collects from The DealMap to tempt mobile phone users. Bing joins Google, Yahoo and Facebook in aping Groupon.

Everyone wants a touch of Groupon's magic these days, and who can blame them? Analysts see the market for coupons offered to users based on their proximity to local businesses blossoming to become a multibillion-dollar market.

Google and Microsoft have bought in, so to speak, though the Internet rivals have taken markedly different paths to providing local deals to their Web service consumers.

Further reading

But these offers aren't generated by any Microsoft couponing service the way Groupon has cultivated its own mediation system of connecting businesses with consumers.

Clicking on the "nearby" link will surface top local offers from Groupon, Restaurant.com, LivingSocial and about 200 other daily coupon sites aggregated by The Dealmap, which covers 200,000 offers in over 14,000 U.S. cities and towns.

Microsoft's effort, geared to boost Bing's usability quotient to help the search engine grow beyond its current 13 percent market share, is the latest of many that have followed Groupon in offering local coupons for users.

One of the more high-profile followers has been Google. Shortly after Groupon spurned a $6 billion offer from Google to take a $1 billion investment, the search engine acknowledged it is testing Google Offers, a prepaid deals program that leverages its large base of local business advertisers.

Yahoo has also gotten in on the deal-making fest, offering Yahoo Local in limited beta for desktop computers and Apple iPhone and Google Android smartphones. Like Bing deals, Yahoo Local aggregates deals from Groupon and other local purveyors.

Not to be outdone, Facebook Deals lets users finds local deals from participating businesses via the social network's Places mobile check-in service. In that vein, Facebook's use case hews more closely to Foursquare's mobile commerce mechanics.

What Microsoft, Google, Yahoo, Facebook and Foursquare all have in common is that they are trying to tap into the multibillion-dollar market Groupon has carved out.

BIA/Kelsey analysts said U.S. consumer spending on deal-a-day offers will grow from $873 million in 2010 to at least $3.9 billion and as much as $6.1 billion by 2015, accounting for certain variables.

"Deal a day has experienced incredible growth during its three-year incubation period beginning in 2008," said BIA/Kelsey analyst Mark Fratrik. "We expect this to continue as companies in the space are rapidly adding markets and increasing total user count."

Fratrik also noted Groupon, Living Socials and the upstarts are targeting "hyperlocal" segments, or subdividing existing metros to provide deals closer to where users live. This will help countermand any "drop-off that may occur due to consumer fatigue as the novelty of the form fades."

But it's clear from their investments that Microsoft, Google, Yahoo and others aren't treating the trail Groupon blazed as novelty.